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end of control book chapter 5 gerd leonhard

end of control book chapter 5 gerd leonhard

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Published by Daphne Dijkerman

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Published by: Daphne Dijkerman on Apr 17, 2008
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06/16/2009

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Chapter 5: Giving up Control at the New York TimesA Blueprint for Media?
On September 19, 2007, the New York Times Company announced it was shuttingdown its subscription offering, TimesSelect, exactly two years after the premium servicelaunched, opening access to all news and editorial columnists. At the same time, muchof the NYT’s archives — the past 20 years and the public-domain years of 1851–1922 —were opened as well. For some reason (a LexisNexis contract, perhaps...?) the Timesdidn’t open the years from 1922 to 1987.Some 227,000 people paid $49.95 a year to get access to TimesSelect (I tried it myself for a while), yielding about $10 million to date. Not bad, but certainly far from a smashingsuccess given the amount of cash the Times must have spent on setting up, marketing,and providing the service to the subscribers.In any case, as the NYT execs pointed out themselves, the most important point is notwhether TimesSelect was a success, but whether it was successful compared to whatthe other options would have been, and how much revenue those other options couldhave generated. (NYtimes.com senior vice president and general manager Vivian L.Schiller commented, “This is what is really important — it did work. It’s just a matter of ascompared to what.”)
Being Part of the Conversation — or Not
These other monetizing options include advertising, of course, but also encompass thesecondary benefits of being available, being linked-to, being read-as-full-feed-RSS, andbeing relevant. In other words, as media critic Jeff Jarvis likes to say, being part of theconversation.How tangible are those secondary benefits, though, and how hard is it to turn them intoreal dollars? The NYT’s future will continue to provide a good case study, no doubt. Ibelieve the NYT will expand on its position as a dominant, global, content-centric brand,with new assets that will soon be developed in blogging/UGC/citizen media, video andtelevision, online radio, games (with a focus on knowledge, training, education), andsearch. All of these developments will based on the same concept that made Google a$200 billion company and 3.5 times as large as all of the public advertising agencies on
 
Madison Avenue combined: feels like free
content, with billions of people literallypaying with attention and with actual dollars.Jeff Jarvis comments, “TimesSelect represented the last gasp of the circulation mentalityof news media, the belief that surely consumers would continue to pay for content evenas the Internet commodified news and — more important — even as the Internetrevealed that the real value in media is not owning and controlling content or distributionbut enabling conversation.”If I may be so bold as to remix this comment into music, it could look something like this:“If the large music companies still believe that consumers will continue to obediently payfor music as a product and on a per-unit basis, their last gasps are what will even further propel the meteoric rise of Apple, Amazon, and Google.”
Conversation Is Content Is King
It may sound trite, but it’s still a good motif to riff on: Rather than preventingconversations by putting the underlying content behind a locked door, or by filtering whois qualified to talk, a media company must now provide more content “for free” — or atleast for what feels like free — in order to engage in conversations across the board.These conversations are crucial because they create new “contextual content” that over time will start to have its own value — just as the value of eBay is in its buyers andsellers themselves, not in what they ship.Content creators and media companies must take note: You probably can’t be a leadinginfluence in your field — and you certainly can’t dominate — from inside the walledgarden, from behind the subscriber-access-only wall. Times have changed: in the future,you can’t avoid offering some of your content for everyone to look at because you needto get everyone to refer to you, talk about you, link to you, make you even more relevant.NYT columnist Thomas Friedman recently shared his opinion on the now-defunctTimesSelect concept: “I hate it. It pains me enormously because it’s cut me off from a lotof people, especially because I have a lot of people reading me overseas, like in India…Ifeel totally cut off from my audience.” He points at yet another problem in our walled-garden media landscape and its prominent embodiments such as iTunes: While some of us Westerners may engage with these services, we will definitely not get anyone in theso-called developing countries such as China or India to look at these offerings: Theyare simply out of reach, and the only thing we end up creating is the impetus for thesepotential audiences to forget about us and go elsewhere.Again, music and media companies take note: Anything but “feels-like-free and thenupsell” will render you irrelevant in those new markets. Your tollbooth paradigm must beadapted, not their consumer habits.This raises the key question, once again: Where does a media creator or company putthe tollbooth, who pays, and how much? Will the toll be paid by someone else, will it bebuilt into the highway (as I am suggesting with the Flat Rate for Music), or would it better to generate values from open usage alone?I’ll devote an upcoming chapter to this question, but for now, I’ll argue that it’s probablyalways a different mix. Just as in music, where different rules and monetizing options
 
apply to a superstar and an unknown artist, different concepts would apply to a scientificpublication, a fashion magazine, or an international newspaper. In my view, a mixedmodel will almost always be the outcome: less or no control here, some new kind of control process there, and always carefully balanced with the shifts in the marketplace.For established companies such as the NYT, there is yet another angle: The highlylucrative, B2B archive services that the NYT provides to companies such as Gale or LexisNexis will obviously need to be kept separate from a 100% open-archive model.This is one example of the challenges traditional media companies are facing in thisnew, lesser-controlled, paid-with-attention world.But let’s take this outside the realm of newspapers. For the music industry, the NYT’sTimesSelect experience shows us that a radio-like, feels-like-free listening experience iscrucial — and that is what the use of music on social networks represents. Socialnetworks are the new radio, with the caveat that going forward they will also have toinclude on-demand and interactive uses of music, such as widgets and personalplaylists. I will cover this in one of my next chapters, on “The Widgetization of Media.”In short, as a consumer-facing company in this new control-less, liquid, user-empowering media ecosystem, you can become or remain a leading player only if youdo not cling to tightly controlling access in an attempt to immediately monetize it.
Sell Everything Around the Content
So what does the NYT really sell? Is it the content itself? Is it those highly paid editorsand writers? ;-) Is it the actual paper it’s printed on? The answer is in itself a blueprint for media: They sell everything around the content, but the content itself feels like free. 1.2million people buying the daily paper for $1.25 does not generate enough money toproduce, print, and distribute it; running NYT events and conferences does not; sellingclassified ads does not; online ad banners do not; About.com does not; the NYT’s radiostations do not; syndicating reviews does not…but the sum of all parts sure does!Some people may argue that in ten years there will be no need for a print edition of theNYT any longer, and some people argue there will be no more CDs in 10 years either. Iwould offer a different angle: They will still exist but they will be a lot more expensive, apremium product with all kinds of added values that only a physical product can deliver (at least for the next 10 years).In music, I think we will have a new, superior physical format emerging in three to fiveyears. It may be rather expensive, and offered at steep premiums, but it will be built on aubiquitous flat rate for music that makes marketing of such a product easy.
All the News That’s Fit To Click
Now here is an interesting variation of the age-old NYT tagline, All the News That’s FitTo Print! The printing has become clicking. To take it further, as I like to do, the buyinghas become clicking. I click and therefore I generate revenue. I participate and thereforeI add value. I get engaged and I pay with attention. Take this theme into music, film, or TV: All the Music That’s Fit to Play. Now that sounds like a great tagline for radio, or indeed for another version of iTunes and the now-WiFi’ed iPod. Just imagine the power 

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